This post’s topic is evergreen—always relevant—because there is always room for improvement in your real estate investing.
It all starts with a state of mind. I base this on my own experience. I have been investing in real estate for over 10 years in Dallas. I started as a part-time investor, like many of you, and I am now a full-time investor. So I draw from my experience and the things I have learned over time—often through the “school of hard knocks.”
We have a responsibility to improve things
In real estate investing, as in other aspects of life, we exist in a world where we have a responsibility to improve—whether that means improving our selves, the lives of others or the conditions around us. One of the things I truly like about real estate investing is that through it, I have the opportunity to improve much more than merely myself and my own lifestyle. Obviously, the core motivation of many investors—and there is nothing wrong with this—is to enter into real estate to supplement your income to improve your current lifestyle, or perhaps to use full-time real estate investing to create a whole new lifestyle.
But in addition to that, you have an opportunity to really make a difference as an investor—that is, to improve the life or circumstances of someone else. You also have an opportunity to make an impact in the community in which you live and work and invest. Further, you have an opportunity to make a business, which improves commerce in your local community. My point is: Real estate investing offers so much more than simply being able to make a living and improve your own life.
Real estate investing is truly a business based on improvement. Nobody benefits, nobody profits until an improvement is made somewhere in the course of a real estate investing transaction.
A change in perspective breeds success
When I came to that realization, it changed my entire perspective on my real estate investing business and my life, and it has helped me become more successful.
The improvements come in many different forms:
- Improvement in the life of the seller when you solve his or her distressed situation.
- Improvement in the life of the person who purchases a home you have rehabbed, whether that is an owner-occupant or another investor who will profit from buying and flipping or holding the investment.
- Improvement in the life of a tenant who agrees to rent one of your properties.
- Or improvement in the condition or circumstances surrounding a property, of an asset, of a piece of real estate. By buying and cleaning up the title of something that has been a nuisance or a hindrance on the part of the seller’s life, you are able to bring new life to that asset, whether it becomes a rental for you, a home that you fix and flip, whatever it may be.
My point is, real estate investing provides many different ways to improve the lives of people or communities. That is why I say it is a business based on improvement and that nobody benefits, nobody profits until an improvement is made.
Let’s dive deep into a couple of these just to drive home the point.
You can improve the life of a seller
First, let’s talk about how as a real estate investor, you have the opportunity to improve or make a difference in a seller’s life. Think about it. You are going in and you are typically dealing directly with homeowners who have some form of distress. It may be a financial distress. It may be a health distress. It may be a personal distress like a divorce or some other traumatic situation. Or it may simply be a distressed house, meaning it needs significant repairs that the current owner is unwilling or unable to do. You are in a position as a real estate investor to provide a solution for that seller and to remove that burden from his or her life and create an opportunity in your own life and business.
You can improve the life of a buyer
You also have an opportunity to improve the lives of buyers. Once you do acquire that property and if you choose to rehab it, you are creating a great opportunity for an owner-occupant to purchase a turnkey, move-in-ready home. So many individuals today are seeking to move into a house that is ready to live in—that doesn’t need paint, carpet or any repairs because you have done them all. That is very enticing to many buyers. Or perhaps you choose to sell the property to another investor—you are satisfying that person’s objective of purchasing an investment property that he or she can then fix and sell or rent, or do whatever he or she chooses based on that investor’s business model.
You can improve the life of a tenant
Finally, you have the opportunity to improve the lives of your tenants. Let’s say you buy a property with the intent of putting it in your rental portfolio. There are many tenants out there who would be thrilled to come across principled landlords and real estate investors who have safe, clean, good quality housing at an affordable prices. When you offer all of those things to a tenant, you make a significant impact in that person’s life. I can speak from experience, as we have many tenants who have been with us many, many years. It is an obvious indication that we are doing the right things, and they are happy with their housing that we are providing, and we have made an impact and improvement in their lives as a result.
A broader impact: improving communities
Now, let’s talk a little bit about the much broader impact of improving communities. So often in my own experience, I have observed that the neighbors are thrilled to see you coming as a real estate investor buying a particular property. I have met many neighbors in their front yards as they have exhaled a sigh of relief to know that I am an investor, I have purchased the property and I have a sole objective of improving that property and getting the next family in there. Quite often, distressed properties are eyesores and nuisances for those who own the properties around them. They have fallen into neglect, sometimes for very legitimate reasons, but nonetheless, they are nuisances for the neighbors around them who are taking care of their properties and have pride in their neighborhood and their homes. An investor has an opportunity to improve the property and improve the community in that way.
Also, you can improve the community and make an impact by providing for tenants. Often, apartment complexes can be very strict on their application rules. Or they can be very strict on their governance. Maybe they don’t allow pets. Or maybe they have really high credit expectations of their tenants. Quite often, independent landlords like us can be a little more forgiving in some of those things, and we can offer housing that is affordable, and we can offer housing with yards, versus apartments. There are many tenants who are seeking those things, and maybe their credit is not perfect, or maybe they have that dog the apartments won’t accept, or maybe they have kids who need a place to play and run. You are making an impact on the community by providing a solution for those type tenants.
Finally, you have an opportunity to improve commerce or to make a business, which is a core objective of many real estate investors. When you create a business through your real estate investing, and you treat it like a business, and you run it like a business, you are engaging vendors and professional tradespeople who are selling products and services to you. Whether it is plumbers, electricians, people who lay tile, roofers or landscapers, you are creating commerce—jobs and an income for other individuals—when you engage them, hire them and partner with them to improve your real estate investment properties.
Also, perhaps you are engaging lenders. You are doing business with the local banks. You are getting loans to purchase properties, you are getting loans to improve properties, and that is just another example of how you are creating commerce and activity and improving the overall economy, even though it may be in a very small way in your local community.
Under that umbrella of improving commerce and making a business, you are serving a customer and satisfying a need. You are providing good-quality, turnkey housing for owner-occupants, perhaps, if you are fix-and-flip investor. Or if you are a fix-and-rent investor, you are serving those tenants whose housing needs aren’t satisfied by the large, corporate-owned apartment complexes that may have very high application standards, or that may not offer yards, may not offer garages, or may not allow pets. You offer a unique and in-demand housing solution for those individuals where the traditional solution of rental housing—apartment living—is just not acceptable, doesn’t work or is simply undesirable for that particular tenant. So you are serving a market and you are satisfying a need and you providing a solution. In all of these ways, you are improving commerce and you are making a business.
So that is what I have learned as a real estate investor. I hope you will too, if you haven’t already. Not only are you able to make a living, but you also can make a difference in someone else’s life. You are able to make an impact in the broader community and you are able to make a business and engage in and improve commerce in your local community.
Investing is often thought of as a very self-serving endeavor, but if you peel it back, the true purpose is not so self-serving. The purpose is to serve others, and that is the secret to success for investors.
You can listen to Kevin’s podcast here:
About the author:
Kevin Guz is a Dallas, Texas-based residential real estate investor with more than 10 years of investing experience. He owns a HomeVestors (or “We Buy Ugly Houses”) franchise as well as the Clear Key companies, which focus on residential real estate wholesaling, rental property management and self-storage leasing. He also is a licensed real estate agent in the state of Texas. He enjoys sharing his ongoing personal experiences, perspectives and learnings from his start as a part-time or “weekend investor” and full-time corporate professional through his ultimate transition to a full-time real estate investor and business owner. You can listen to his podcasts at http://www.blogtalkradio.com/kevinguz.